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Ugh!

At what point does a magazine publisher damage their brand with subscription discounts?

delicious magazine is the latest magazine title to be promoted nationally using the livingsocial deals service. The price offered, $32 for a year of issues mailed, is 50.7% lower than the retail cover price.

While I will defend the right of any magazine publisher to offer and promote subscriptions as part of their marketing and supply mix, promoting such a steep discount and in a mass market way can only harm sales through the retail channel.

Maybe I am missing something.  Maybe the people behind this title inside News Limited have a plan which will result in more subscriptions for them and no impact on sales in newsagencies and other retail outlets. Ah, if only this were so.

Magazine publishers need to work harder at engaging with newsagents to drive incremental business. By engaging I mean being creative to today’s marketplace.  There are titles delivering growth by doing this. yes, it’s hard work and sometimes it does not pay off. But when it does you can bank on better margin dollars than a drop-your-pants subscription offer.

I am not going to retaliate against delicious. There is no point. If the actions of the publisher result in fewer retail sales this will ultimately hurt them.

Steep discounting at places such as livingsocial damage a brand in my view. They show the lengths a supplier will go to in order to shift stock. It says to me that the product manufacturer does not think the ticket price for an item is justified. Maybe my view is too narrow.  Time will tell how it plays out for companies using this type of service.

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magazine subscriptions

M2 magazine cuts cover price by 68%

Check out the subscription promotion for M2 magazine on living social. They are selling an annual subscription at 68% off the cover price and they are copping the cost of postage on top of that.

While I understand the need for subscription in the mix for publishers, I do not understand why they need to discount at this level and create a dual speed supply proposition for people who could engage with their title.

Nuts.

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magazine subscriptions

Unmerchantable Little Friends from ACP

Check out what the Little Friends bundle pack from ACp looked like yesterday. Inside the sealed pack is an old copy of the magazine with a sticker from the previous newsagent. Someone, I am guessing at Network, put a line through the price and the barcode. They damaged the cover in doing this. It would have been easier to remove the sticker as it has a non-damaging adhesive.

I can’t sell this copy of the product – it is not compliant in my view and is being early returned.

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magazines

Why the 50% increase in supply of Picture Premium?

Despite zero (0) sales of the last two issues of Picture Premium, ACP decided we should get two more copies, a 50% increase. This does not make sense. ACP pushed to get sales data from newsagents, citing more accurate supply as a benefit. Given that we are sending back accurate sales data on time through XchangeIT it appears to me that for some titles ACP is ignoring our sales data. I can’t see any reason for the increase in supply of this title.

My assessment of the data is that we should not get the title at all. However, if we must then one or two copies.

Click on the image to see our historical data for this title.

ACP subsidiary Network Services is agressive in its handling of newsagent debt. Newsagents ought to be equally aggressive in pursuing the company over oversupply.  My experience is that it happens too much with these porn titles.

I’d like ACP to research why oversupply has happened here and for the previous title I wrote about this morning. Yes, I could have approached the company. I am writing publicly about the on behalf of myself and others who experience oversupply like this.

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magazines

Too many home girls for this newsagent

Despite selling 1 and two copies respectively for the last two issues, ACP decided not adjust supply and send us 8 copies of Picture Home Girls annual. I’d take two copies but not 8, these titles don’t sell in our family oriented conservative area. the sales data shows that. ACP has the sales data to supply at a fair level.

Click on the image to see our historical data for yourself. ACP prides themselves on scale our based on sales. Not with this title.

We are early returning four copies just in case there is something in this issue which results in us doubling our best sales of the last two issues.

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magazines

Misleading tweets from The Age

While it was terrific to see The Age using Twitter to promote their Good Bar Guide, a disconnect in their distribution system saw not all newsagents with the title. Shoppers see newsagents as newsagents. They don’t know if they are retail only and relying on a commercial distribution newsagent to support their publisher supplier by placing a product in the newsagent outlets they supply.

I did not get the Good Bar Guid yet shoppers see my business as a newsagency.

I wish for a distribution system which enables me to access supply of newspaper related product from elsewhere. I have an account with IPS, why not use IPS for this type of title?

A distribution newsagent making petty decisions in an effort to block or harm my business also lets down their supplier and consumers. Dumb.

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Newspaper distribution

Poor quality stock from Network Services

The bagged copies of Jamie magazine we received on Friday were unmerchantable in our view. On full view from the front of the pack was an old copy of Jamie magazine with the old price label on it. This would confuse shoppers.  Some of the labels were of a poor quality and they detract from the professionalism of the product.  We made the decision to early return all stock. These products should not have got through QA at Network.

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magazines

Gotch tries hard to stop us selling magazines

Gordon and Gotch recently cut our supply of Real People magazine as I blogged here. We had the former supply reinstated. Now, the experts at Gotch have cut us back again – denying us certain sales of a popular title. Click on the image for details of what Gotch has done by way of manual intervention to our supply of this title.

Getting answers to why Gotch would do this is tougher given the retrenchments in recent weeks.

All I want is certain supply so that I can at the very least maintain the certain sales I am achieving for a title.

Magazine distribution should not the this hard yet it is. And publishers wonder why newsagents act as the do on some fronts.

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magazine distribution

How is that magazine relay going?

I am surprised at the number of newsagents who say they read this blog every day yet have not undertaken a magazine relay in the last year. Gob-smacked actually.

Undertaking a complete magazine relay is the single most important action a newsagent can take for the benefit of their business right now. It plays to the key point of difference we have – magazine range.

Why would you not do a relay? If can’t be because you don’t know where to start – check out my advice on how to do a magazine relay.

Come on people. If you consider yourself to be a newsagent get cracking. The only risk is that you could increase your magazine sales.

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magazines

Gotch cuts T3 supply to below average sales

Magazine distributor Gordon and Gotch has cut our supply of T3 magazine from 6 copies to 1 without justification. This appears to be another manual intervention by the magazine experts at Gotch – but I don’t see much expert influence unless their objective is to reduce our magazine income. But that would not make sense … why would they do that?

I have contacted the publisher for their side of the story.

If you click on the image to see the supply, return and sales data for the title for the last twelve issues. Based on our history for the title I’d suggest supply of 4 or 5 copies would be ideal. Why Gotch would cut us is beyond me.

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magazine distribution

Why does a US$12.99 magazine sell for AU$32.50 here in Australia?

Country Home Spring sells in the US for US$12.99. Magazine distributor Gordon and Gotch prices this title at AU$32.50. This does not make sense at all, especially when you consider the current exchange rate between the Australian dollar and the US dollar.  Even allowing for shipping cost, this title should be selling for around AU$15.00 here.

So, who is making the money?  Is this a magazine which Gotch purchases in bulk, by weight, and sets an Australian price to meet financial requirements in the company? We will never know because Gotch management is not transparent about this.

Why should Gotch be transparent with newsagents? Simple, because this title makes newsagents look expensive. Shoppers are not stupid. They can see the US price. Some will ask newsagents about the price difference, others will form an opinion and leave without sharing it.

If sales of the parent title, Country Home and Interiors, are not great this special edition could be a target for early returning. I’d look at this sales data and consider the risk of theft of which a high-priced title.

That said, maybe the best way for us to make our point would be for every newsagent to early return this title, today. I bet it would get their attention.

Gotch should have to get my permission to send me a title with a cover price above, say, $20.00. Since it is my money at risk they should ask first. They will say it is too hard. I’d respond with – nonsense!

But back to my point, why is this title priced do high? What gives Gotch?

Footnote: it seems that the conversion rate for the parent title is different to that used for this special issue.

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magazine distribution

Cookbooks you could early return

Gotch earlier this week released cookbooks to newsagents which, in my view, could be early returned. These titles have no brand connection for us and are overpriced compared to similar titles in our newsagencies.  The titles, Healthy Switch and Soups, Sauces & Marinades add nothing to our magazine shelves. We have a full suite of food titles, even in these niches, so why add more stock to us? Gotch would know that we are full yet they send the stock anyway.

So, for me, these two titles are a good example of the few titles which could be legitimately early returned right away.

The better approach would be to ask if we want the titles.

When it comes to niche food and other titles I look for an existing masthead connection for relevance or for some other evidence of support for the newsagency channel through collateral, advertising or some other activity to drive traffic. These very generic titles from Gotch have none of that.

What frustrates me more is that I can go to the cheap book outpost near my newsagency and see almost identical titles for under $5.00.

I appreciate that some people will read this as a confusing message about early returning.  It’s not for the reasons I explained above.

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magazine distribution

52% increase in supply of Moshi Monsters magazine

The magazine experts at Gordon and Gotch have increased our supply of the Moshi Monsters magazine by 53% with the latest issue which went on sale yesterday.  We received five copies for two issues and sold out so they increased us to twelve copies and sold out then they cut us to eleven copies and sold our. Next, we received seventeen copies and returned ten copies. Next, with the latest issue we received twenty six copies.

So, I am wondering if there is a special promotion we have missed or some other reason not obvious to us for the supply increase.

Magazine distributors should not be allowed to send such a supply increase without our permission, not in any circumstance. It’s my money, my retail space, my labour. They have no right to take here resources from me on this scale.

Other publishers please take note of this. If you’re a Gotch customers, ask why the increase in supply and ask Gotch what they communicated with us. If I have missed something then I’ll apologise. If there is no reason and no missed communication then Gotch owes me an apology and an immediate credit.

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magazine distribution

Wendy Harmer can’t have looked at too many country newsagencies

Writing at the New Matilda website, comedian and media personality Wendy Harmer talks about newsagents:

You only have to live in one of Australia’s regional towns to understand how vital diversity in our media really is.

The offerings at most newsagents — if the town still has one — are paltry. A copy of The Australian; an out-of date metro title like The Age or Daily Telegraph and a weekly local paper are usually what’s on offer.

I am not sure how many regional newsagencies Wendy Harmey has visited or how recently. I suspect not that many. A typical regional newsagency has the current newspaper(s) from the nearest capital city. If may have newspapers from other capitals depending on customer interest. It will also usually have around 1,000 magazine titles on all manner of topics.  That’s some diversity

Harmer’s piece is really a promotional piece for the New Matilda website. Fair enough, they can promote their site how they like. They should not, however, do it by talking down newsagents who play a vital role in delivering local access to a diverse selection of print media products.

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Media disruption

We need to get political about Australia Post

Reading the latest Australia Post catalogue it is clear that the operators of the government owned and protected corporation will put the needs of their shareholders and protectors, the federal government, ahead of the needs of small businesses.

We newsagents complain but what are we doing?

Unlike supermarkets, convenience stores and others winning business from those who might otherwise have shopped at our businesses, Australia Presents us an opportunity because of the government ownership.

A relentless, professional and  co-ordinated campaign could get the politicians to have to make a decision. They go on about competition policy yet for selfish reasons ignore their own advice. I think that they are weak on this.

The problem is that Australia Post is not a broad small business issue. It is an issue particular to newsagency businesses.

It frustrates me that politicians on all sides support this government owned business and through their support permit it to continue to target small businesses, like newsagencies. They have to decide whether they want profits from Australia Post or jobs in newsagencies.

Look at the items on the front cover of the catalogue. What do they have to do with postal services?

Section 14 of the Act requires Australia Post to provide a postal service first and foremost:

The principal function of Australia Post is to supply postal services within Australia and between Australia and places outside Australia.

Section 15 talks about permitted subsidiary functions:

A subsidiary function of Australia Post is to carry on, outside Australia, any business or activity relating to postal services.

Section 16 talks about other permitted functions:

Functions incidental businesses and activities

(1) The functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is incidental to: (a) the supplying of postal services under section 14; or (b) the carrying on of any business or activity under section 15.
(2) Without limiting subsection (1), the functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is capable of being conveniently carried on: (a) by the use of resources that are not immediately required in carrying out Australia Post’s principal or subsidiary function; or (b) in the course of: (i) supplying postal services under section 14; or (ii) carrying on any business or activity under section 15.

The last federal government and the current one have permitted Australia Post to take millions of dollars in revenue from small business. The situation is getting worse.

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Australia Post

New ATO benchmarks for newsagency businesses still wrong

The latest performance benchmarks for newsagency businesses issued by the ATO a few weeks ago are wrong in my view and will most likely result in more newsagents having their business records audited.

While the new benchmarks are an improvement on what the ATO published last year, the remain ignorant of the facts. For example, they say the average cost of sales is 70%. I know many newsagency businesses where this is not the case. The considerable variation is a testament to the diverse nature of the businesses which trade under the newsagency shingle.

 

Having had one of my newsagencies audited because of faulty benchmarks, I am concerned that the new benchmarks have not adequately addressed the situation.

The ATO benchmarks should accurately reflect newsagency trading situations as they are used by the ATO to determine if a newsagency business should be audited. This happens when the business results fall outside or near the borders of the benchmark.

Newsagents should click on the link and read all the ATO numbers and what they say about them. If you are trading outside the benchmarks, get ready for a call from the ATO.

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Newsagency management

Free gift with Harpers Bazaar damages the look of a quality magazine

The folks at ACP magazines would be disappointed to see the damage to our stock of Harper’s Bazaar today. file the magazine itself is in tact, the card holding the free gift is crumpled and ripped in many cases. This damages the product in the eyes of the shopper.

I like the gift with but not the way it has been packaged with Harper’s Bazaar. A quality magazine does not look so good on our shelves.  I have seen in the past that such damage can be a turn off to shoppers and dilute the sales bump the publisher is seeking by providing the free gift.

After I took the photo we adjusted the stock to place the less damaged copies at the front of the display.

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magazines

News Limited columnist talks down retail

The Sunday Herald Sun today carries a column by Terry McCrann, Bleakest of views from the shopfronts, in which talks down retail off the back of some poor numbers from Woolworths and JB HiFi. McCrann’s column is ignorant.  It lacks attributable facts.

Okay, some sectors of retail are doing it tough. Some geographic areas too. Plus there are differences between high street and regional.  But there are plenty of retailers growing. McCrann ignore this. Maybe because it does not fit his style.

McCrann also makes them mistake of politicians and many media outlets – despite knowing that small business retail is the backbone of retail in this country he relies on big business experiences to support his opinions.

A smarter column from McCrann would have sought to understand the differences between the business which are growing and those which are not. It could be that there are decisions retailers can make to trade more successfully in the circumstances in which we find ourselves today. That’s what I think … that there are decisions we can take to improve our own situation.

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retail

Merchandisers acting as spies

Is it just me or are magazine publishers sending more merchandisers into our newsagencies to take photos of displays of competitor products? This is poor form in my view. If a supplier is paying for a resource to visit my shop it should be to add value too my business. Further, they should ask before they photograph something other than what they have done.

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Ugh!

Luxury Travel oversupply by Gordon and Gotch fails

Two months ago I wrote about the unjustified increase in supply of Luxury Travel magazine by magazine distributor Gordon and Gotch. The title has failed to work, it did not sell. It has spent the two months on the shelf, taking up a pocket, not selling a single copy. And, yes, we gave it time in the best spot in travel titles.

While the magazine geniuses at Gordon and Gotch will no doubt say that there is a reason they increased my supply from 2 copies to 5 and that I am wrong to complain here, they will have no evidence to support their position. They made the wrong decision to increase my supply. Indeed, it looks to me like a cash grab – they had spare stock and had to place it somewhere since I suspect they make more money shipping magazines out than holding them in the warehouse.

Magazine publishers wondering why newsagents early return their stock need look no further than this blog post. It is this type of unjustified magazine oversupply which causes some newsagents to struck back, early returning product without looking at sales data.

Fix whatever caused the unjustified oversupply of Luxury Travel and you take a good step toward fixing magazine oversupply.

Let’s look at the consequences of the Gotch behaviour with this title. They increased my supply from 2 to 5. They supplied on the last trading day of December.  They got their distribution fee and they will get their return fee. They also got my cash for the extra 3 copies for a while. There are some newsagents who think this is the key game of magazine distributors – cash management.

All I know is that Gotch has failed yet again and no amount of spin from the top of the company can excuse this appalling and on-going behaviour. The evidence speaks for itself.

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magazine distribution

Bill Shorten is wrong to target newsagents on demarcation

Minister for Employment and Workplace Relations Bill Shorten on Q&A on ABC1 on Monday night made a passing remark about newsagencies – that they could learn something about demarcation, as if we are doing something wrong in this area.  He was talking about having done four workplace agreements at Alcoa and was lauding the flexibility of the Alcoa workforce demonstrated in the negotiation.  Then, immediately after the Alcoa example about resolving demarcation issues, direct to camera, with a tone laden with accusation, he said:

There’s something for the old newsagencies and pharmacies and doctors to think about.

Watch Shorten say this for yourself. Click here. Go 47 minutes in. Do not have anything which could damage your TV in your hand.

Shorten’s comment grossly misrepresents newsagents.  He joins News Limited columnist Mark Day to be in the running for the most ignorant comment about newsagency businesses this year.

Seriously Bill? Newsagents and protection and or demarcation?  How?  What evidence do you have? I am not aware of any at all. You need to apologise to newsagents. As a minister of the crown you should think before you speak and be certain of your facts.

Either Bill Shorten made an off the cuff comment without thinking, is misinformed or deliberately targeted us for some other reason.

Newsagents have been extremely flexible in agreeing terms and accepting change in their relationships with newspaper publishers, magazine distributors and government for many years.

John Howard used the ACCC to guide in complete deregulation of the newsagency channel in 1999. Bill should know that.  Maybe he does and maybe he made his comment because it suited part of his constituency.  I am not aware of any demarcation dispute. Maybe Bill could enlighten us.

Regardless of why Bill said what he said, he needs to be re-educated. One of us newsagents needs to kidnap Bill Shorten and hold him in one of our businesses for a month. Let him see what life is like on the inside. Let him live the life of a protected newsagent and see whether he can see demarcation disputes or issues in play.

I used to like Bill Shorten. I felt he was someone I could trust. After Q&A I see him as a politician who will say whatever he thinks he needs to say to get votes and or support.

Newsagency businesses in Australia are not protected whatsoever. Nor should we be.

Here are Bill’s contact details for newsagents who would like to educate him:

PO Box 6022
House of Representatives
Parliament House
Canberra ACT 2600

Tel: (02) 6277 7320
Fax: (02) 6273 4115

Twitter: @billshortenmp

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Newsagency challenges

Where is the ABC Football magazine?

The ABC yesterday launched a new Football magazine, an annual.  The thing is, I can’t find a newsagent with this title.  The TV commercial says that it’s at a number of retail outlets including newsagents. Hmm … I wonder what went wrong.  Based on our AFL record sales I think we could easily sell 30 or more copies of this new ABC title.  That’s close to $300 in sales.  If only we had the stock for the launch day.

Mumbrella has more including a copy of the TVC. This is where I got the cover shot from.

Newsagents, if you got the title please let me know.

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magazine distribution

Frustrating research on Valentine’s Day

On the radio this morning I just heard a report of some new research into Valentine’s Day saying that more women will not purchase a Valentine’s Day gift this year and that the value of gifts purchased will be lower.  seriously? How is such a speculative item news, especially given that we retailers will know by the end of today how tyne season has gone for us.

This type of research frustrates me, especially where it has findings which are contrary to my experience and where the news of the research itself could guide consumer behaviour.

Media outlets should stick to reporting news rather than speculation.

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Ugh!
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